PMI, or private mortgage insurance is required on any 1st mortgage with a loan to value of 80% or greater. Contrary to what many believe, its purpose is to protect the lender (not the mortgage holder) in the event of a default on the mortgage. As you pay down your mortgage to below 80% LTV (most require you to pay down to 78%), you should consider what your options are for getting rid of this extra payment.
1. Keep up with homes are selling for in your neighborhood. If you are at 78% loan to value based on what comparable homes are selling for, then simply call your lender to discuss this with them. Personally, I would call even at 80%. They may require you to put your request in writing and they may require an appraisal which you will need to pay for.
2. Refinance. If you know that your home would appraise for at least 20% more than you owe, then perhaps a refinance should be considered. This can accomplish many goals such as reducing your rate or converting an adjustable rate to a fixed rate at the same time. Just know that you will incur fees so make sure there is room for those fees within the 80% loan to value ratio.
3. Pay Down Your Mortgage aggressively. If you aren't close to being at the 80% LTV, then you need to look at how you get their as quickly as possible. You can pre-pay principal to make this happen, but the absolute best way to pay down your principal in the fastest amount of time is with a Money Merge Account. The Money Merge Account is a new system being used by thousands of homeowners across America to reduce their mortgage by 1/3 to 1/2 with out refinancing. It's not for everyone, but currently, you can get a FREE Mortgage Savings Analysis from MortgageZapper.com. I highly recommend the Money Merge Account as a valuable financial planning tool. It will not only help you reach your goal of paying down your mortgage to reduce PMI, but will help you achieve the seemingly unattainable goal if paying off your mortgage completely.
Once you get that extra $50 - $200+ in your pocket every month, I strongly recommend speaking with an investment advisor to discuss the best way to make it grow even further.
Showing posts with label Money Merge Account. Show all posts
Showing posts with label Money Merge Account. Show all posts
Friday, May 30, 2008
Wednesday, April 30, 2008
Using A Home Equity Loan to Pay off your Mortgage?
So the Fed's are continuing to bring the short term interest rates down, this is good news. Some will say it doesn't matter, but lets take a look at what it really means.
Short term interest rates that are tied to the Prime are now a bit lower. Granted most people won't notice because many people choose to live on credit card debt. If you are looking to make a difference in your personal finances, now is a time to aggressively attack those credit cards.
How, you ask? Well, now Home Equity Loans are much lower as well. Back in 2004 Home Equity Loans (a.k.a. HELOC's) were all the buzz. As a loan officer, I think I did at least a few every week. They were like super sizing a loan "would you like a home equity loan with that? There is no additional cost and no extra closing costs as long as you keep it open for 3 years, and you never have to use it". It worked like magic and it was what people wanted. The savvy consumers took advantage of them and converted high interest credit card payments into lower interest, partially tax-deductible payments.
Well, it's 2008. and again, it's a great time to get a Home Equity loan, but this time, I don't just recommend paying off debts with it, I recommend paying off your mortgage with it. WHAT? Yes, you heard me right - I am recommending that you payoff your first mortgage with a Home Equity Loan. Before running out and doing this on your own, I will tell you that you have to work with a financial expert to make this work otherwise, you will be in lots of trouble. There is a special software that will take into account all of your debts including your first mortgage and show you how to leverage short term interest and its payment cycles to pay off all of your debts, mortgage included, in the shortest amount of time - usually less than 10 years.
If you want more information on how to get this done, you can visit UFirst, or call me at 800-453-9290
Until next time,
Anthony
Short term interest rates that are tied to the Prime are now a bit lower. Granted most people won't notice because many people choose to live on credit card debt. If you are looking to make a difference in your personal finances, now is a time to aggressively attack those credit cards.
How, you ask? Well, now Home Equity Loans are much lower as well. Back in 2004 Home Equity Loans (a.k.a. HELOC's) were all the buzz. As a loan officer, I think I did at least a few every week. They were like super sizing a loan "would you like a home equity loan with that? There is no additional cost and no extra closing costs as long as you keep it open for 3 years, and you never have to use it". It worked like magic and it was what people wanted. The savvy consumers took advantage of them and converted high interest credit card payments into lower interest, partially tax-deductible payments.
Well, it's 2008. and again, it's a great time to get a Home Equity loan, but this time, I don't just recommend paying off debts with it, I recommend paying off your mortgage with it. WHAT? Yes, you heard me right - I am recommending that you payoff your first mortgage with a Home Equity Loan. Before running out and doing this on your own, I will tell you that you have to work with a financial expert to make this work otherwise, you will be in lots of trouble. There is a special software that will take into account all of your debts including your first mortgage and show you how to leverage short term interest and its payment cycles to pay off all of your debts, mortgage included, in the shortest amount of time - usually less than 10 years.
If you want more information on how to get this done, you can visit UFirst, or call me at 800-453-9290
Until next time,
Anthony
Thursday, January 03, 2008
4 ways to agressively reduce your mortgage balance in 2008
Most well known financial gurus (Suze Orman, Dave Ramsey, Charles Givens) advocate paying off your mortgage early when possible. Most likely you've heard about adding extra principal payments to your mortgage to pay it off early. It definitely works, but most people are not disciplines or financially educated enough to do this consistently enough to make a difference. Here are 4 different strategies to keep in mind when looking for ways to pay down your mortgage without changing your lifestyle.
1. Make simple principal payments. I won't assume that you have a fixed conventional loan, but if you do, the difference is that you will not realize the benefits up front. It will reduce your principal at the end of the loan, or at the time of pay off. If you do have an Interest Only loan, you can make principal payments at any time, and the next month, you will see the evidence of a reduced payment because you cannot pay interest on principal that does not exist. Making periodic payments will help you, but not much and you really won't see the benefit until you either sell your home, or was down the road when you pay it off.
2. Make bimonthly payments. If you are paid every two weeks and live on a monthly budget, you will have two extra payments per year which you can put towards your principal payments, this will result in a mortgage reduction of approximately 7 years on a fully amortized 30 year mortgage.
3. Make consistent payments in excess of one payment per year. If you can afford it, you can make additional monthly payments in as much as you can afford. If you can afford to make double payments, then you will pay your home off exponentially quicker. If you calculate your payment based on a 15 year amortization and make that payment every month, you will pay it off in 15 years. The challenge here is that it will be a large payment.
4. Leverage Short Term Interest to Pay your mortgage. This is a new and more advanced financial planning concept, but it is catching on in the states. In short, you would acquire a home equity line of credit and use this account to deposit your check in and pay all of your bills out of. The theory is that as you deposit your checks, you will offset any interest payments and any discretionary monies will be used towards the mortgage. The BIG advantage, is that you can leverage the line of credit to pay down your mortgage in large amounts at the most opportune time based on your loan structure. This allows for the absolute fastest reduction of a mortgage (reduces the term by a third to a half), and even better, you can then take those funds once you have paid off your loan and begin to invest. In the end, instead of paying off your mortgage in 30 years, you will have paid it off in about half the time, and put those fund into an investment account and you are now not only debt free, but have used your home to accumulate more wealth than most people ever dream of.
I am promoting Option 4 as it is the most reasonable option for the average homeowner and the emphasis is on paying off the mortgage in the shortest amount of time without changing your current budget. This program can even help people with little to no equity and those who owe more than their home is worth. After a short period of time on the program, you will be back in your equity position and not have to take a loss if you need to sell.
If you are interested in a free mortgage analysis to see if your mortgage qualifies for this program, please contact me at anthony @ atozlender.com
Wishing you the best in 2008!
Anthony
1. Make simple principal payments. I won't assume that you have a fixed conventional loan, but if you do, the difference is that you will not realize the benefits up front. It will reduce your principal at the end of the loan, or at the time of pay off. If you do have an Interest Only loan, you can make principal payments at any time, and the next month, you will see the evidence of a reduced payment because you cannot pay interest on principal that does not exist. Making periodic payments will help you, but not much and you really won't see the benefit until you either sell your home, or was down the road when you pay it off.
2. Make bimonthly payments. If you are paid every two weeks and live on a monthly budget, you will have two extra payments per year which you can put towards your principal payments, this will result in a mortgage reduction of approximately 7 years on a fully amortized 30 year mortgage.
3. Make consistent payments in excess of one payment per year. If you can afford it, you can make additional monthly payments in as much as you can afford. If you can afford to make double payments, then you will pay your home off exponentially quicker. If you calculate your payment based on a 15 year amortization and make that payment every month, you will pay it off in 15 years. The challenge here is that it will be a large payment.
4. Leverage Short Term Interest to Pay your mortgage. This is a new and more advanced financial planning concept, but it is catching on in the states. In short, you would acquire a home equity line of credit and use this account to deposit your check in and pay all of your bills out of. The theory is that as you deposit your checks, you will offset any interest payments and any discretionary monies will be used towards the mortgage. The BIG advantage, is that you can leverage the line of credit to pay down your mortgage in large amounts at the most opportune time based on your loan structure. This allows for the absolute fastest reduction of a mortgage (reduces the term by a third to a half), and even better, you can then take those funds once you have paid off your loan and begin to invest. In the end, instead of paying off your mortgage in 30 years, you will have paid it off in about half the time, and put those fund into an investment account and you are now not only debt free, but have used your home to accumulate more wealth than most people ever dream of.
I am promoting Option 4 as it is the most reasonable option for the average homeowner and the emphasis is on paying off the mortgage in the shortest amount of time without changing your current budget. This program can even help people with little to no equity and those who owe more than their home is worth. After a short period of time on the program, you will be back in your equity position and not have to take a loss if you need to sell.
If you are interested in a free mortgage analysis to see if your mortgage qualifies for this program, please contact me at anthony @ atozlender.com
Wishing you the best in 2008!
Anthony
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